China economic data in focus later as local equities soar

China is solved, get involved.

It’s a slow process to turn around a ship or an economy and that’s certainly been the case with China. Hints about stimulus and rate cuts have repeatedly failed to deliver or only delivered half-measures but –slowly– those half measures have added up.

The latest was this week’s report saying China’s government is considering buying unsold homes to ease oversupply. That and the other measures have slowly provided an uplift to economic data that the market has suddenly tuned into.

The result has been a one-way trade in the Hang Seng since late April.

Shanghai and mainland equities haven’t done quite as well but shares gained yesterday and US ETFs are bubbling today with the MCHI ETF up 1.9%.

Helping to underscore that has been the record-breaking rally in copper, which is tightly tied to Chinese demand (China uses 50% of the world’s copper).

Assumptions about the strength of the Chinese economy are likely to be challenged later as we get a full slate of economic data for April including:

• Retail sales
• Industrial production
• House prices
• Unemployment

I will be curious to see if that data reverberates in the market in the day ahead.

This article was written by Adam Button at www.forexlive.com.